Power Tools: Juiced for the holidays

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The economics of home improvement gives power tools an advantage over other merchandise categories during house-market downturns.

“Power tools look to be one of the categories retailers can really leverage going into the holidays,” said Mark Delaney, NPD Group’s director of home improvement. “Sales are really not tied to the housing market.”

Those comments are based on the theory that when the average consumer isn’t actively building a home or adding a room—jobs for professionals—he is more likely to take on a project himself, lifting demand for power tools that help get the job done right. With fewer people taking out home equity loans, the larger home project tends to be put off for later. “The power tool category responds well to the smaller, DIY projects that this economy encourages,” Delaney said.

OTHER FINDINGS:

Store visits (43.9 percent) and the Internet (38.1 percent) were by far the leading methods of research for consumers shopping for power tools. Among consumers in the $150K income bracket, Internet research spiked to 60.9 percent.

The 18-34 age group leads all other age brackets in power tool purchases, at 36.5 percent. Consumers under the age of 45 account for about 62 percent of power tool sales.

NPD consumer research shows warehouse home centers lead all channels in sales of power tools (see fig. 1), and drills lead all other power tools in terms of sales, followed by combo-kits, electric saws and air powered tools (see fig. 2). Drills generated 29.9 percent of dollar share and 37.7 percent unit share and carried an average price of $51.53. Comparatively, the average price for power tools across the board was $65.06.

Methodolgy

NPD research is based on monthly tracking of 30,000 opt-in respondents in 70 categories. The data above reflects the period from July 2006 to June 2007.

The pronoun “he” is the operative word for the power tools. Power tools are a male-dominated category (see fig. 4), with more than three quarters of buyers being male. But the role of females should not be overlooked—particularly during the heavy gifting holidays of Christmas and Father’s Day. Power tool purchases at department stores increase noticeably in the periods leading up to these holidays—for instance, channel share at department stores jumped to 15.3 percent in the quarter leading to Father’s Day. That jump is caused by the link between mall-based department stores and holiday shopping at the mall.